IDAHO PUBLIC UTILITIES COMMISSION

Case No. IPC-E-07-18, Order No. 30478

December 27, 2007

Contact: Gene Fadness (208) 334-0339,
890-2712

The Idaho Public Utilities Commission is granting an Idaho
Power Company motion to conduct a workshop in Boise on Jan. 15 to consider how
the revenue from the company’s sale of sulfur dioxide emission allowances might
better benefit customers.

Idaho Power sold 35,000 sulfur dioxide (SO2) emission
allowances during 2007 for $19.6 million less brokerage fees. The share
allocated to Idaho is about $10.1 million, after discounting income taxes and
the share that goes to Idaho Power’s Oregon customers.

Last year, about $69 million in SO2 sales proceeds was
used to offset the company’s power purchase costs, with 90 percent of the
proceeds going to customers and 10 percent to company shareholders. Idaho Power
states it is willing to again apply 90 percent of this year’s sale proceeds to
the annual Power Cost Adjustment (PCA), which offsets power purchase costs.
However, the company suggests there may be other ways to use the SO2 proceeds
to provide greater long-term value to customers.

For example, Idaho Power said the 90 percent customer
share of proceeds could go to buy green tags from owners of small-wind projects
or other renewable projects that have entered into PURPA contracts with the
utility. If state or federal renewable portfolio standards (RPS) were enacted,
which would require Idaho Power to acquire a certain percentage of its
generation from renewable sources, the utility would likely have to buy green
tags at prices expected to be higher than today’s prices. If Idaho Power were
to buy green tags before an RPS mandate, the company could sell the green tags
on a short-term basis and flow the proceeds to customers through the PCA.

Another option suggested by Idaho Power is that it enters
negotiations or solicits bids to buy a wind project. The company maintains that
by owning a wind project rather than buying energy from elsewhere, customers
would have added access to renewable energy at competitive prices. Further,
customers would retain the value of the green tags associated with the wind
project or project.

The commission is inviting persons or groups interested in
determining how the revenue from the sale of the SO2 allowances for 2007 should
be treated to participate in the workshop. The workshop will begin at 9:30 a.m.
on Jan. 15 in the commission hearing room at 472 W. Washington St. in Boise.